Restrictions on Robinhood traders got tighter throughout the day on Friday, only allowing clients to buy a single share of GameStop.
The stock trading app also expanded its list of restricted stocks from 13 earlier in the day to 50.
“The table below shows the maximum number of shares and options contracts to which you can increase your positions,” Robinhood wrote. CNBC recreated the table.
The restricted list tells clients how many shares and options contracts they can buy pertaining to a particular security. Robinhood customers can only buy one share and up to five options contracts of GameStop; however, if a customer already owns one or more share of GameStop, they are not able to buy any more shares.
Robinhood’s restrictions could take the wind out of point-and-click traders trying to jack up the price of GameStop. Robinhood, however, will not sell any client’s shares of GameStop that are already over the one-share limit from a previous position.
The stock, which closed up 67%, was off its highs of the session as the new more severe limits were implemented. Earlier in the day, clients could buy five shares of GameStop.
The most shares clients could buy of any of the 50 stocks was five. Clients without existing shares can only buy one share and 10 options contracts in AMC Entertainment, which is down from an earlier 115 shares. Shares of AMC Entertainment closed up 53% but also well off their highs of the day. Clients can only buy one share of American Airlines, Bed Bath & Beyond and Koss.
The stock trading app has also expanded its list of restricted stocks. Some of the new names include Advanced Micro Devices, Starbucks, Novavax, General Motors and Beyond Meat.
On Thursday, Robinhood told clients it was only allowed to sell shares, not buy new ones, in certain securities that were garnering social media attention from Reddit crowds. The firm also raised margin requirements, or the amount of money in a client’s account when they will be using leverage to buy a security. Robinhood’s decision was met with outrage, with many users taking their grievance to Twitter.
Robinhood said the trading restrictions were risk management decisions to protect Robinhood and its clearinghouses, but touted that the restrictions would be eased on Friday.
The free trading pioneer raised $1 billion in investor money and tapped more credit lines overnight for its clients to be able to trade names like GameStop and AMC Entertainment on Friday.
However, the restrictions got tighter throughout the trading day, as the list of limited securities grew and the number of shares clients could buy shrunk for certain stocks.
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Source: Finance - cnbc.com
